Buying & Selling Houses: More information

Legal terms explained - find out more!

Completion

The day you can move in to the property if you are buying and must move out if you are selling and when the balance of the purchase price is paid.

Deeds

Legal documents confirming ownership of the property. If you have a mortgage, your mortgage company should hold these. If not, you should have them or they may be held by your solicitor. If the property has been sold, transferred or mortgaged recently there may not be any deeds available but official copies of the Land Registry registers will be used.

Deposit

A proportion of the purchase price, normally between 5% and 10%, which is paid over to the seller on exchange of contracts. That is what solicitors understand by the term. House builders sometimes use the term to describe money paid to secure the right to buy a property being built. Banks and Building Societies call the deposit the difference between the purchase price and their mortgage.

Estate agent

A firm that markets property on behalf of the owner. They will advertise the property and arrange for prospective purchasers to view it. They charge the seller for this service.

Exchange of contracts

The solicitors do this. Once contracts are exchanged there is a legal contract for you to buy the property. You are now committed and if you pull out you may have to pay a heavy financial penalty. The seller is also committed and also may have to pay a heavy financial penalty if they pull out.

Fixtures and fittings Form

A form completed by the sellers giving the purchaser more information about what is included in the sale with the building, for example, carpets, garden ornaments, fitted cupboards. Fixtures are assumed to be included. Fittings are not.

Gazumping

Where the seller accepts a higher offer from another buyer just before exchange of contracts with the first buyer.

Gazundering

Where just before exchange of contracts the purchaser demands a price reduction or they will not exchange.

Home Information Pack (HIP)

A pack of information about the property which may help a buyer to decide whether or not
to purchase the property.

Home Buyers Survey

A detailed survey, carried out by a surveyor, giving rather more information about the structure of a property than is supplied to the mortgage company in a simple valuation survey.

Land Registry

A government organisation that holds details of who owns property in England and Wales.

Land Registry Fee

The Land Registry charges for its services, which include giving information about the current registered owners of a property and registering new owners.

Land Tax

A tax paid to the government by purchasers on completion. The amount payable is based on the value of the property. 

Local Authority Search

These are questions put to the local authority about plans they have for the area around the property. This is done by submitting a form to the authority who reply on a standard form. The results will show, for example, whether there are plans to build roads or other developments nearby.

Mining search

Will show whether there are old mine workings under the property.

Mortgage

A long term loan to buy a home. It is repaid by monthly instalments over, typically, 25 years.

Mortgage indemnity guarantee insurance

Mortgage companies may insist that you take out this insurance if you wish to borrow 75% or more of the purchase price. It protects them in the event that you are unable to repay the mortgage.

Mortgage offer

An offer from a mortgage company saying how much they are willing to lend. This must be in writing.

Property Information form

A form completed by sellers giving more information about the property such as whether there are any neighbour disputes.

Redemption Penalty

A charge made by a mortgage company if the mortgage is repaid early. The charge can amount to six months worth of mortgage payments or even more. Such high penalties usually only apply in the early years of mortgages that came with attractive discounts.

Survey

A report about the structure and condition of a property. Typically, the more expensive the report, the more detailed it will be reflecting the time spent by the surveyor at the property.

Valuation report

The cheapest type of survey that does little more than give the surveyor‘s view of the value of the property.